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Episode 606 – Japanese Production Delays, Detroit’s Comeback, UAW Recruiting Activist Army

March 24th, 2011 at 12:22pm

Toyota, Nissan, Honda and many other companies are facing production disruptions around the world because of the disastrous situation in Japan.  Detroit’s automakers are roaring back to life, hiring workers and engineers, and expanding their operations.  The UAW is recruiting an activist army from countries around the world.  All that and more, plus John shares some of his thoughts on Hyundai’s luxury car, the Equus.

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This is Autoline Daily for March 24, 2011. And now, the news.

JAPANESE PRODUCTION DELAYS
The aftereffects of the Japanese earthquake are spreading. Toyota says production will be disrupted in North America; however, it did not say which plants will be affected, for how long, or when. Nissan CEO Carlos Ghosn says about 40 suppliers in Japan are still facing production shortages and called the situation “serious” and “difficult to evaluate.” He says it will take until mid-April before two plants are able to resume major production. Some Japanese suppliers are considering moving production to China if things don’t improve. Honda is extending production shutdowns at two plants in Japan until early April. The company also says it will take several months for its R&D center in Japan to get back on line and will move those operations elsewhere in the meantime.

DETROIT’S COMEBACK
Here’s all the proof you need to see that Detroit’s automakers are recovering quickly.  GM will bring back 2,000 laid-off workers by September. These were the last workers on layoff, which means when GM hires new workers it can bring them in at a lower wage. And Chrysler says it’s running out of space at its headquarters in Auburn Hills, Michigan. The giant facility is designed to hold about 11,000 employees and right now the company has close to 10,800 in the building. Chrysler wants to move more service operations out of its headquarters and is trying to keep vital functions within. And Bloomberg reports that the Detroit Three are hiring engineers so fast, they’re having trouble finding them. So they’re looking to Silicon Valley to hire workers. The number of technology job openings has doubled in Detroit since last year making it the fastest growing region in the country.

UAW RAISING ACTIVIST ARMY
And speaking of Detroit and jobs, the UAW is raising an army of activists to organize foreign transplants.  According to The Detroit News, the union has created something called the “Global Organizing Institute” to help recruit and train protesters.  Here’s where things get interesting.  The UAW is signing up activists in countries like China, Japan, Brazil and India.  The idea is to have them wave banners, protest at dealerships and pass out leaflets – generally make a ruckus to put pressure on companies to agree to the union’s terms.  The global scope of this strategy is truly unprecedented for the UAW.  It’s also forming alliances with other labor organizations, like IG Metall in Germany as well as the Japan Auto Workers union.  This strategy could work.  Companies have never faced world-wide pressure from unions before.  As for the UAW’s first foreign target, nobody’s talking so your guess is as good as mine.

ZF AND SAAB TEAM UP
It’s not unusual for suppliers to build truck frames for automakers, but it’s very strange for them to provide complete chassis assemblies.  Autoblog reports this is exactly what’s happening between Saab and ZF.  The German transmission maker is building a plant in Trolhättan, Sweden near the automaker’s home factory to put together front subframes and complete rear-suspension assemblies.  The parts are thought to be for the next-generation 93.

BURGESS IS BACK, BABY!
And now a follow-up on last week’s automotive ethics story that occurred here in Detroit but reverberated across the country. Scott Burgess, the car critic who resigned from The Detroit News when the newspaper edited out some of his critiques of the Chrysler 200 after an advertiser complained, is going back to the News.  Talking with Autoline Daily last night, Burgess said that he and The News resolved their differences and that he would return as the paper’s auto critic next week.  However, in an ironic twist, Mr. Burgess doesn’t technically restart at The News until Monday afternoon because that morning he speaks to a college journalism class on the topic of ethics. By the way, Scott will be here hosting Autoline Daily when I’m out-of-town next month so it’ll be interesting to see if he comes equipped with a commentary.

Coming up next, some of my thoughts on the new Hyundai Equus.

2011 HYUNDAI EQUUS
But you know something, it may be too late.  Until just a couple of years ago the company wasn’t really on anyone’s radar.  But today it has SERIOUS momentum in North America.  Its products like the Genesis, Elantra and Sonata are all super-solid offerings, and they’re the vehicles that paved the way for Hyundai to bring the Equus the U.S.  Still, this car is a good example of what the company’s capable of.

Slide behind the wheel and you’re greeted by soft leather on the seats and dashboard, plus it offers nearly every luxury amenity you can think of.  Things like massaging seats, adjustable suspension, iPod connectivity and more.  You name it and the Equus probably has it.

If the front seats are nice the rear ones are thrones.  They’re more adjustable than a living-room recliner PLUS the legroom puts private jets to shame.  And that’s really what this car is all about.  It’s designed for wealthy buyers to get chauffeured around in.  That’s not to say it’s an un-enjoyable drive, because it’s not.  It’s a very competent luxury car . . . yes, I just called a Hyundai a luxury car.  The Equus is big, it’s heavy and it’s SUPER refined.  Going down the road it’s as quiet as anything in its class, and the body feels like it was carved from a solid chunk of steel.

A 4.6-liter V-8 is tasked with moving all that mass.  It churns out a very respectable 385 horsepower on premium fuel with 333 pound-feet of torque.  A silky-smooth ZF six-speed automatic transmission sends that oomph to the rear wheels.

Getting the Equus to America likely took a huge push.  I suspect the Koreans were desperate to prove to they could compete the best in the world, and therein lies the problem.  They rushed it.  As I’ve mentioned before, the exterior design is the car’s biggest letdown.  It doesn’t do it justice.  You pull up to the country club driving this thing nobody’s going to notice.  Most people will probably think it’s an old Mercedes or Lexus.

I’d bet Hyundai America told Korea to wait until the next-generation Equus was ready before bringing it to the U.S., but they were too antsy.  I’m anxious to see what the upcoming version is like.

Don’t forget to tune in to Autoline After Hours tonight at 7:00 p.m. Eastern Time. Our guest will be Ken Lingenfelter.  Journalist Jim McCraw will also be stopping by. Join me and the Autoextremist, Peter De Lorenzo for the best insider news in the business.

And that’s today’s report on the top news in the global auto industry. Thanks for watching, we’ll see you tomorrow.

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog and WardsAuto.com

25 Comments to “Episode 606 – Japanese Production Delays, Detroit’s Comeback, UAW Recruiting Activist Army”

  1. HtG Says:

    WSJ reports Hitachi mass airflow sensors are in short supply due to the Japan disaster. Here’s a quote from the subscriber only article(don’t taze me bro)

    “Hitachi, which has a 60% share of the world’s market for airflow sensors, said it hopes to resume operations by Saturday, but isn’t sure how much of its capacity will be restored by then. The area is suffering from water and power shortages.

    The sensors cost about $90 each in retail stores. While supplies of the chip are still available and Siemens AG and Robert Bosch GmbH also make airflow sensors, some auto makers are curtailing production out of fear that their supplies could run out.

    GM, which uses Hitachi airflow sensors on several of its vehicles, has halted production of small pickup trucks at a plant in Shreveport, La. It made about 4,100 pickups at the plant last month. It also stopped some production Monday at plants in Eisenach, Germany, and Zaragoza, Spain, because of short supplies of the sensors.”

    Hitachi is a city on the northern coast of Japan.

  2. tj Martin Says:

    John ; I have to say after reading several other reviews of the Equus as well as having had a look myself , along with my recent KIA Rental Experience and AutoWeeks reviews of late that your praised for the Equus are at best undeserved .

    Hit a few Expansion Joints ( an endemic problem with ALL H/K’s ) get your hands into the materials the interior is made of , take a good long look at the quality of construction compared to say a Toyota Camry , never mind a Lexus and the Dung underneath the Gold Leaf comes screaming thru in spades .

    Nope John . I know Hyundai has their little Ads showing up here from time to time , but its ABOUT TIME for some solid Gorilla Journalism such as Mr. Burgess has been practicing when reviewing the Hyundai/KIA line up .

    ————————-

    @ Speaking of Mr. Burgess , in my Opinion the Detroit News owes the General Public and especially its Subscribers a Huge apology for its actions with the Chrysler 200 Review .

    Their actions Severely Discredit ANY Opinion/Review articles they may have printed in the past as well as those in the Future .

  3. HtG Says:

    While Scott Burgess has gotten justice from the Detroit News, I wonder when some other journalist will name the advertiser that leaned on the editors. Obviously it’s Chrysler, but does Sergio have ‘mani pulite?’

  4. Jerry Says:

    Hello John,

    I’ve heard the disaster in Japan is impacting the domestics even more than they admit. You might want to investigate further. This could stall the domestics rise from the grave.

  5. tj Martin Says:

    Recommendations to FORD ;

    Build the Shelby GR1 at C6 Corvette prices .

    Slap a Micro Chop Top Lead Sled early 50′s Mercury body on the Siesta/Fiesta , go after that need for Retro , and go head to head with MINI with some American DNA !!!

    Get your 4 Cylinder engines up to snuff .

    Bring back an evolved Ford GT and slap it to the Italians and the Germans once and for all . You’ve spent the Ground Up development money , so now just evolve it slightly and recoup your investment while making us proud to BE Americans

    Chevrolet ;

    Build the 2004 NOMAD concept with the good bits underneath and take on MINI as well .

    Chrysler ;

    Get your quality and reliability up to par with your Hype and Advertising . Substance Chrysler … not BS is what will pay off in the long run .

  6. tj Martin Says:

    HtG;

    The NYTimes reported it was a Detroit area Chrysler Dealer that put the pressure on the Detroit News to tone down the critique . The NYTimes had a copy of Burgess’s original article and lets just say he makes me look mild in comparison . He had NOTHING good to say about the 200

  7. HtG Says:

    I was implying that whoever did it, the source was the fish’s head.

    last call on No Angel, tj.

  8. bob Says:

    Here are my once a week five cents:

    1. On Mulally compensation: I largely agree with TJ MArtin’s comments about overcompensated Divas and undercompensated CRUCIAL employees under them.

    MUlally no doubt deserves lots of credit and millions, if not for him, Ford would be bankrupt long ago.

    HOWEVER, did you notice the OUTRAGE that this IDIOT Bill Ford, the guy who ADMITTED he ran Ford into the ground and stepped down and gave mUllaly his place, ALSO got TENS OF MILLIONS in UNdeserved AND UNNEEDED (the clown is a BILLIONAIRE, he does not even NEED the $!!!) compensation?

    This was a TRUE OUTRAGE. BUT I am not surprised, there is a HUGE AND BLATANT conflict of interest in EVERY company, since the CEO APPOINTS HIS OWN COMPENSATION BOARD!!!!!

  9. Ralph Kercheval Says:

    Sounds like the UAW and Mr King are learning the lessons of Jesse Jackson and the ilk. It boils down to a form of extortion “We are going to make SO MUCH noise you will pay us off just to get rid of us”

    MR. King look at where the majority of the automobiles are being built NOT IN THE USA and why?? Who in their right mind is going to put up with the nonsense.

    Being in the automobile business in what was a Union strong hold at one time, there are a number of people that look down on US cars due to the precieved poor quality of UNION workmanship

  10. bob Says:

    Re the LExus compact hatch-hybrid CT 200h

    I did not test drive it, but I saw it a week or two ago and wrote about it here last Thu.

    The leatherette or whatever the trademark name Lexus uses was almost as good as leather, minus the smell maybe.

    DO NOT call it “VINYL”. It m ay be some far more expensive and high quality PLASTIC, but it is NOT specifically VInyl.

    I have friends who or whose parents bought Mercedeses with that leather substitute (leatherette) and they were very happy with it, it never broke or was damaged. And if you have small kids that tend to make a mess, it should be the way to go in your E class diesel Wagon, not leather.

    Back to the CT, it gets 42 MPG EPA Agv which is impressive, but not as good as the 50 MPG of the lexus.

    I CAUTION you however, that using MPG is a poor substitute to using gALLONS PER MILE instead. BECAUSE if you compare a 11 vs a 13 MPG HOG, the extra gas you need, DO THE MATH, will be MUCH MORE than the extra gas you will need going from the 50 MPG Prius to the 42 MPG CT200H.

    The CT was Designed to be a SPORTY, near-lux Prius. The shape and tires sure contruibute to its worse MPG. Kit says the two have the same poweertrain, BUT I susp0ect that there MUST BE a ton of differences in the Computer PROGRAMMING of the combustion etc. Are their two transmissions identical? The best way would be to see a FULL test on car and driver, they are very good at giving all the stats.

  11. bob Says:

    And speaking of LExus and COPnsumer Reports, I recently read a review of the LS460. CR gave it the highest score it gave ANY car for its test drive EVER, an UNbelievable 99%.

    I cannot START telling you in how many ways this is a LUDICROUS evaluation. No time for that. Suffice it to say that iuf you also read the TEXT of the same CR test drive, they thenmselves found a TON of faults with it, so, WHQT GIVES, cONSUMER REPORTS????????? you ARE INCONSISTENT WITH YOUR OWNM REVIEW VS SCORING!!!!

    And anybody who really believes that this pimped up BUICK, tjhe LS 460, really deserves a 99% score for its TEST DRIVE (NOT its quaklityu or reliability!!!!!!), needs to have your head examined, so do not even dare think to contradict this.

    I respect the LS460, it may be the ONLY Lexus I will bother considering, I don;t like the fake camry at $10k more (ES350) and all that other Ugly junk they make. (which drives ecven wprse than it looks!) BUI have NO ILLUSIONS that this bedroom on wheels drives like a 7 series, or EVEN like the S class!!!

  12. bob Says:

    And now for the EQUUS. It sure is a “halo car”, it is designed to make Huyndai owners proud, BUT what a TIMID Effort!!!!

    WHAT GIVES with the pitiful exterior styling?????? Instead of being a POOR copy of the S class and the LS 460 styling, it SHOULD have a DISTINCTIVE styling of its OWN, so when you see it you would IMMEDIATELY recognize it and NOT go “Wow, look at that S class or lexus LS that has been in a fender bender!”

    Styling, and Exterior styling, is a BIG part of such ueber-l;uxury cars, they are NOT Economy cars that you buy because they are $5kl cheaper than the competition, or even $10k c heaper!

    The guy who will shell out $65k fro this ugly POS Equuus, for this guy, $5k or $10k is NOTHING, so why not go for the RESAL DEAL and shell out the extra 10 or 20 k and get the 7, S or LS instead?

    it makes no sense other than a “Halo car” for INTERNAL consumption by Hyundai fanatics.

  13. Chuck Grenci Says:

    John, you mention that the EQUUS is as quiet as anything in its class; I’m not trying to be a smart-aleck here but what class would that be? I really don’t know what I would compare it to; does it compete with the top of M/B, the top BMW, the top Asians or is it in Cadillac class? I know I’d have a CTS-V (maybe even a loaded CTS non-V)before an EQUUS. It’s just got no soul.

  14. HtG Says:

    After only walking around an Equus at a dealer, I do wonder what input John Kravcik had on this vehicle. It looks like a purely benchmarked product, exactly like the kind of thing Bob Lutz wrote put the detroit three behind the Japanese. And after having heard JK talk about Sonata, he’d have to learn a whole nuther way of talking about this here Equus.

  15. Lex Says:

    I hope Scott Burgess got a raise too!

    What is it with Honda? I attempted to replace the battery in my Pilot’s Key Fob and striped the screw right out of it. This should have been a very simple operation. I learned from the dealer that Honda puts Locktite on these screws. The Honda Dealer says I need to pay over a $100.00 to get a new key cut and reprogrammed. This is really bad way to do business. This is another example of how Honda has taken their customers for granted. Honda might not be on top of my list the next time I need a new vehicle.

  16. tj Martin Says:

    @ HtG ; Thanks again but I’ll pass on Bernie’s Requiem . It sounds like a lot of the same stories ( minus the Ex Wife ) found in ” The Power Brokers ” and the “Power Game ”

    @Bob ; WTF planet are you living on ???

    “Lexus ……..pimped up Buick ”

    Are you really THAT utterly clueless when it comes to cars ???

    Say the Lexus is a bit dull . Even call them boring . But lack of quality ??? I’d lay down a solid bet any day that any 10 Lexus 400 series of ANY year have had less repairs or reliability problems than your ONE BMW & Series .

    Exciting and inspiring ( except for the LF-A and the IS-F which in the right hands will kick the crap out of an M3 with 1/100th of the problems ) Lexus is not .

    Poor Quality though ? Wake up and smell the Sushi . Lexus has been slapping it to ALL the Luxury Brands on the Quality and Reliability front since DAY ONE .

  17. 02 Touring Says:

    John, regarding your item about ZF supplying SAAB with axle systems, its actually not that strange at all. ZF has been supplying complete axle system assemblies to automakers for a number of years now. The first generation X5 (E53) and all M Class mercedes are just two examples of vehicles that have complete axle modules from ZF.

  18. tj Martin Says:

    @ Lex ;

    Honda et al with remote key fobs DO NOT WANT YOU TO REPLACE THE BATTERY !

    They want you to buy a new key/remote ( seriously …. they do )

    Think $100 is bad ? Price the Key/Remote for an Audi . Hint ? The cost would cover a damn nice dinner for two at a Michelin 3 Star restaurant . Wine included !!!

  19. dcars Says:

    Equus seams like the first installment by Hyundai, like the sonata I think better things are coming. Although in this segment I don’t think it’s a good Idea to start out with such a non player in a competitive market

  20. XA351GT Says:

    Ralph , I’m with you. This sounds like economic terrorism to me. Give us what we want or else we’ll ruin your business. Now I ask again is there any wonder why more and more people despise unions? If they step on the property I hope they get their asses arrested for trespassing. If your not there to buy a vehicle or at least shop for one you have no right to on the property.

  21. Brett Says:

    Yeah, those danged unions got a lot of nerve not just rolling over for the fatcats and corporations. How dare they globalize like the corporations! How dare they not let themselves be demonized and snuffed out! Oops, gotta run! Glenn Beck’s coming on!!

  22. Zieke Says:

    Bob,
    Maybe you need to own a quality Lexus for a change before you bash them. My 2000 with 115k on it is not falling apart like many, many other cars of that vintage. Original struts, etc. make this vehicle a real value to own. The trans. and all-wheel drive mechanics have stayed flawless as has the interior.
    And you can can the caps. People on this blog don’t need stupid exclamation points!!!!!

  23. XA351GT Says:

    Brett,
    So I take it you think it’s okay for someone to disrupt someone’s business? Dealerships don’t build the cars they only sell them. Why involve them in their fight with the Manufacturer/ If you want to take on the the manufacturer then protest at their factories or headquarters not at a dealership owned by a independent operator.

  24. Brett Says:

    XA,
    I take it you think it’s fine for corporations and the rich to buy a government and have it pass laws to suit only them?

    This stopped being nicey-nice country-club republican “just business” about a decade ago. Now it’s a full-fledged fight for survival of the middle class.

    Why don’t we give drug dealers a pass? They only sell the stuff. They don’t make it! Your argument is specious. The dealers represent the manufacturers and are a legitimate fulcrum to apply leverage.

  25. XA351GT Says:

    How the hell is comparing a ILLEGAL activity even a legitimate argument. That is just plain stupid. What I’m saying is if your pissed at the company go after the company. Don’t be a P*SSY and go after a dealer who is INDEPENDENT . He buys the vehicles he’s not given them by the factory. Want to change the government and how it works I’m all for it. Anything less than a revolution it’s not going to happen . You can vote out one set of thieves and bring in another it won’t matter.